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Young Japanese Professionals Flock to Australia for Lucrative Job Opportunities

“Japan’s economic prospects are being questioned by the younger generation,” stated Yuya Kikkawa, an economist at the Meiji Yasuda Research Institute. He emphasized that the actual living conditions are much harsher than what the headline inflation rate indicates.

Last month, the Bank of Japan eliminated the world’s last negative interest rate amidst indications of a positive cycle of wage increases driving demand-led inflation. However, despite the significant wage hike achieved by Japanese trade unions last month—the largest in over three decades—a substantial disparity in real wages persists compared to other advanced economies.

In 2022, the average annual wage in Japan stood at US\(41,509, notably lower than Australia’s US\)59,408 and the US’s US$77,463, as per the latest data from the Organisation for Economic Cooperation and Development.

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Traditionally, prioritizing job security over higher salaries made sense when prices were relatively stable. With inflation now at its peak in decades, Japanese citizens are beginning to realize that years of stagnant wages have left many struggling to make ends meet before each paycheck.

Atsushi Takeda, the chief economist at Itochu Research Institute, highlighted, “Japan’s wages remained stagnant for two decades while other nations were experiencing growth in their wage rates.” He added, “The depreciation of the yen has widened this gap even further.”

A significant number of 14,398 Japanese individuals were granted working holiday visas in Australia during the fiscal year 2022-23, marking the highest figure in Australian government records dating back to 2001. This visa allows individuals aged 18 to 30 (or 35 in some cases) to enjoy a 12-month holiday in Australia while working in various sectors such as farming, hospitality, nursing, construction, or office roles to support their stay. There is also an option for extension up to three years.

Apart from the appealing wages, Japan’s youth find Australia attractive due to its perceived safety, similar time zone to Japan, and recent policy changes allowing visa holders to work for extended periods in specific industries.

The increasing trend of individuals seeking employment abroad may further exacerbate the challenge of hiring young workers in Japan.

Harumi Taguchi, an economist at S&P Global Market

Australia has always had a lenient visa system, but recent modifications extending the employment duration have made it even more accessible for Japanese individuals to relocate there,” stated Kotaro Sanada, a spokesperson for the Japan Association for Working Holiday Makers.

Besides Australia, Canada issued 7,996 working holiday visas by October 2023, while the UK granted 898 visas last year, based on data from the respective countries. New Zealand approved 2,404 visas in the fiscal year 2022-23. Sanada anticipates a further increase in these numbers as regulations become more relaxed. With the annual visa quota for Japanese raised from 1,500 to 6,000, the UK is expected to become a popular destination.

“If this trend persists, the recruitment of young workers in Japan could become even more challenging,” remarked Harumi Taguchi, principal economist at S&P Global Market Intelligence.

Lili Takahashi, who recently graduated from college, flew to Australia this month with plans to spend two years on a working holiday. She is considering applying for permanent residency and marrying her girlfriend there, as Australia permits same-sex marriages, unlike Japan.

Meanwhile, the higher wages in Australia, coupled with the yen’s depreciation against the Australian dollar to a nearly decade-low, offer a better work-life balance.

Takahashi, 22, expressed, “While Japanese wages may be sufficient for survival, it is disheartening to think that I would have limited funds for hobbies and socializing if I remained in Japan.”

The surge in working holiday visas aligns with a broader trend of Japanese individuals opting to reside overseas. The Ministry of Foreign Affairs reported that last year saw the highest number of Japanese permanent residents abroad since the survey’s inception in 1989.

This trend could exacerbate the persistent labor shortages in Japan’s aging society, where companies are competing for a dwindling pool of human resources.

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A survey revealed that over two-thirds of small and medium-sized enterprises are grappling with labor shortages, with a record number of bankruptcies attributed to workforce constraints last year, according to a Teikoku Databank report. To address demographic challenges, the government welcomed a record number of foreign workers into the country last year.

Takeda from Itochu noted that the emigration of Japanese workers hinges on the economic forecast. He remarked, “If conditions conducive to rapid growth materialize in Japan, there might be a rationale for the younger generation to return.”